Another week, another 52 week high made by the NASDAQ. Although the Fed raised the federal funds rate again, investors have for the most part tuned out the negatives and have chosen to focus on the expected lower taxes, overseas profit repatriation, and potentially higher inflation in the coming years ahead. Not surprisingly, many big name tech stocks have done well year-to-date.
In this article, we recap some recent analyst commentary concerning Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Twilio Inc (NYSE:TWLO) and we use the latest 13F data to determine elite fund sentiment toward the names.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).
According to Pacific Crest’s Brent Bracelin, Amazon.com, Inc. (NASDAQ:AMZN)‘s dominance in the cloud should not be taken for granted. Based on his research, Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOG)‘s cloud offerings are ‘viable global alternatives’ with the former’s Azure service winning more contracts than before due to more (previously skeptical) channel partners jumping aboard. Both Microsoft and Alphabet have stronger financial profiles than Amazon, and both companies have invested substantial resources to beef up their cloud offerings. Although Bracelin believes AWS has a ‘multiyear lead’ versus Alphabet and Microsoft, his research indicates that AWS’ growth might be slowing. Per his calculations, AWS revenue growth will dip below 40% for this year and grow less than 30% for 2018. The slower growth for AWS might mean more market share for Microsoft and Alphabet. In terms of ratings, the analyst has a $70 price target on Microsoft and an ‘Overweight’ recommendation. Bracelin has a $895 price target on Amazon, down from the previous $905. According to our data, the smart money loves all three stocks almost equally. Of the 742 elite funds that we track, 126 were long Alphabet Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) while 123 funds were long Amazon.com, Inc. (NASDAQ:AMZN) at the end of 2016.
On the next page, we examine what analysts had to say about Apple Inc, and Twilio Inc.